GSJ: Volume 10, Issue 8, August 2022

ISSN 2320-9186 33

GSJ: Volume 10, Issue 8, August 2022, Online: ISSN 2320-9186

www.globalscientificjournal.com

Challenges of corporate governance in Zimbabwe: What is the problem? A view from selected
managers in Harare.

1. Godfrey Chifaka, godchif@gmail.com

Graduate School of Business, National University of Science & Technology; Zimbabwe

2.Dr David Foya, foyad1965@gmail.com,

Department of Business Management, National University of Science & Technology; Zimbabwe

3. Nkosana Ncube, nncube@nac.org.zw , Department of Business Management, National

University of Science & Technology; Zimbabwe

ABSTRACT
The title of this paper is challenges of corporate governance in Zimbabwe: What is the problem? A
view from selected managers in Harare. The aim of the paper is to assess the extent of adoption of
the Zimbabwe corporate governance frameworks. Corporate Governance in the business arena
incorporates transparency, fairness, independence, accountability, among other things. Zimbabwe
has witnessed collapse and closure of companies mainly due to Corporate Governance breaches. The
study investigated the major corporate governance problems in Zimbabwe. The study was carried out
in Harare where structured questionnaire and interviews were employed to gather data. The results
do indicate that the major corporate governance problems are lack of transparency, lack of fairness,
lack of integrity, lack of lack of trust and lack of honesty. From the interviews, which were conducted
to seek further clarity on other issues, it was found out that the major problem was appointment of
board members, characterised by nepotism, political connections and purging of those in authority
who speak against incompetence, criminal abuse of office, misuse of stakeholders’ funds and
corruption, and lack of action by the responsible authorities. It was concluded that there is need for
creation of awareness of the presence of the corporate governance code. The research paper
recommends that there is need for the responsible authorities to take action against offenders and to
protect those who speak against wrong doers.
Keywords: Corporate Governance, ZimCode, Shareholders, Stakeholders, Corporate Governance Code
Acronyms and Abbreviations

PSMAS Premier Service Medical Aid Society

ZBC Zimbabwe Broadcasting Corporation
AFRE African Renaissance Bank
UMB United Merchant Bank
CEO Chief Executive Officer
ZSE Zimbabwe Stock Exchange
PFMA Public Finance Management
IoDZ Institute of Directors of Zimbabwe

GSJ© 2022
www.globalscientificjournal.com
GSJ: Volume 10, Issue 8, August 2022
ISSN 2320-9186 34

LSE London Stock Exchange

JSE Johannesburg Stock Exchange
ICAZ Institute of Chartered Accountants of Zimbabwe
IFRS International Financial Reporting Standards
IMF International Monetary Fund
TI Transparency International
OECD Organisation for Economic Co-operation and Development
1.1 Background of the study
Corporate governance in the business arena incorporates transparency, fairness, independence,
accountability, responsibility, integrity and social responsibility, among other things. According to
Mukute and Marange (2006), corporate governance is the system by which organizations are
directed, controlled and held to account. Zimbabwe has witnessed closure of many companies,
including banks in the past two decades. This can be attributed partly to poor corporate governance
practices. Rossouw and Sison (2006) say that corporate governance is geared towards ensuring that
companies take responsibility for directing and controlling their affairs in a manner that is fair to
stakeholders. They go on further to say that this responsibility is either taken voluntarily by the boards
of directors of the companies or imposed upon them by the regulatory authorities. Former Reserve
bank of Zimbabwe (RBZ) Governor, Gono (2006) is of the view that the prevalence of lop-sided
corporate governance systems, accentuated by greed-driven and rent-seeking inclinations to graft, as
well as lack of integrity, is cancerous. Muranda (2005) supports this view by saying that in Zimbabwe
corporate governance has attracted a lot of attention since the financial crisis in 2003 because several
companies have faced problems associated with corporate governance flaws.
From this end, Al-Majed (2008), observed that one of the greatest benefits produced by the adoption
of best practices of corporate governance is providing a secure environment to encourage the flow of
capital into domestic markets This is supported by Zimbabwe’s former Reserve Bank Governor, Gono
(2008) that good corporate governance and integrity in business are the bedrock and foundation to
sustainable economic and social prosperity. Bosch (2002) also acknowledges that good corporate
governance is critical and desirable because it is envisaged that investor protection has increased with
huge surge in share ownership therefore good governance will increase the creation of wealth
through performance improvement of honestly managed and sound companies. Howarth (2004)
concurs and indicates that companies with good governance systems achieve good and better share
price. In Zimbabwe, we have problems in regard to all the above.
The global financial crisis and indeed our economic turmoil has highlighted the challenge of
establishing good corporate governance, stability and growth in the face of global recession (Mutasa,
2013). The author goes on to suggest that it has brought into focus the critical importance of the
ethical dimension in leadership styles and strategies, since the financial crisis emanated at least in
part from a breakdown in responsible and ethical behaviour. Mutasa (2013) further says that lack of
proactive approach by the regulatory authorities appeared to have encouraged poor corporate
governance practices and that the failure by the board of directors to adapt to the demands of a
changing competitive environment affected the adherence to the principles of good governance.
An outstanding issue of corporate governance, that needs to be debated, is the “comply or explain”
principle as alluded to by Manoiu, Damian, and Strouhal (2015).
Manoiu et al. (2015) clarify that the concept of comply or explain had an important impact in Europe
since 2006 when the European Commission (EC) introduced comply or explain for the first time in
European law, and for this principle to be applied, three elements must be present, which are: a real
obligation to comply or explain; a high level of transparency, with coherent and focused disclosures;
and a way for shareholders to hold company boards ultimately accountable for their decisions to

GSJ© 2022
www.globalscientificjournal.com
GSJ: Volume 10, Issue 8, August 2022
ISSN 2320-9186 35

comply or explain, and the quality of their disclosures. In this regard, Zimbabwe has deficits in all the
aspects mentioned above.
In Zimbabwe, as outlined by Sifile, Susela, Mabvure, Chavunduka, and Dandira (2014), several
companies have faced difficulties associated with board failure. Of note are companies like Air
Zimbabwe, Premier Service Medical Aid Society (PSMAS), Zimbabwe Broadcasting Corporation (ZBC),
African Renaissance Bank (AFRE), United Merchant Bank (UMB), ENG Capital and Barbican Bank. They
go on to demonstrate that the major causes of corporate scandals were centred on poor oversight
and lack of proper monitoring of the chief executive officers (CEO) and executive directors by the
board leading to corporate governance breaches. Sifile et al. (2014) observed that while board
structures were in place in the organisations, the board of directors had the biggest share of the
blame for its failure to monitor management.
They further claim that due to the widespread and the seemingly never – ending spectre of scandals,
the Zimbabwean Government notes with concern the plethora of scandals and company failures
bedevilling the country and affecting the people and the economy at large. This has led to the
proposal to form a parliamentary committee to deal with corruption, scandals and misdemeanours
perpetrated by those in fiduciary positions. But a point noted by the researcher is that have these
portfolio committees yielded anything in their endeavours? The researchers further note that there is
now the Zimbabwe Anticorruption Commission (ZACC) but since its inception, there has been no one
who has been jailed, let alone arrested for criminality yet it’s there for everyone to see that fifteen
billion dollars diamond money went missing. Are they toothless bulldogs or they lack independence?
Njanike (2011) expresses that the main cause of corporate failures and fraud in Zimbabwe has been
blamed on ineffective internal controls that are used in measuring the compliance levels of managers
in the day to day running of organizations by the board. They also report that laxity of implementing
effective internal controls, greed and in some instances poor or lack of board supervision emerges as
contributors to poor corporate governance in many institutions. In their research on internal controls
as mechanisms for ensuring good corporate governance, Foya and Changunda (2019) have argued
that the lack of transparency in the appointment of board members by ministers have had negative
effect on the operations of various companies and parastatals. Furthermore, the Board of Directors
have failed to ensure that systems of internal control continue to operate effectively and efficiently
the board must set targets and the board gets updates and reports from executives in meetings. In
this regard therefore, Ayogu (2000) hints that:
the underlying thesis is that a crisis of governance is basically a crisis of the board of directors
and that the problem of corporate governance is concerned with the design of institutions
that induce management in their actions, to take into account the welfare of stakeholders–
investors, employees, communities, suppliers, and customers. Board members are effectively
chosen by the senior executives and thus are answerable to them. Given that, the
shareholders elect the board, but they invariably simply select from the menu of candidates
on the proxy statement circulated by management. Therefore, management effectively
decides who is nominated. Could this be the Achilles Heel of the Zimbabwean corporate
landscape?
However, Essen, Engelen, and Carney, (2013) argue that other good governance prescriptions such as
board independence, incentive compensation, and the separation of CEO and board chair, have on
the whole proved harmful to firm performance in times of crisis. They further support their position
that the implication for practitioners suggests that governance prescriptions aimed at constraining
executive discretion need to be optimized rather than maximized, and corporate boards should
consider loosening the reins to enable senior management to respond effectively to changing
circumstances. They conclude that the implication is that corporate governance prescriptions could
be better optimized for periods of good economic performance, where the primary emphasis is upon
maximizing shareholder wealth, and for periods of adversity, where the emphasis may need to shift
toward restoring stability and re-establishing corporate resilience.

GSJ© 2022
www.globalscientificjournal.com
GSJ: Volume 10, Issue 8, August 2022
ISSN 2320-9186 36

At present, corporate governance practices in Zimbabwe are regulated by the Companies Act
(Chapter 24:03) and Zimbabwe Stock Exchange Act (Chapter 24:18) (ZSE) listing requirements, Public
Finance Management Act (Chapter 22:19) (PFMA) as well as the rules of various professional bodies
such as the Institute of Directors of Zimbabwe (IoDZ). The ZSE has adopted listing rules based on
those of the London Stock Exchange (LSE) and the Johannesburg Stock Exchange (JSE). The IoDZ has
been effective in enforcing corporate governance standards as derived from the United Kingdom
Cadbury Report and the South African King Report.
Maune (2015) suggests that there are a number of regulations in place that governs the activities of
companies in Zimbabwe and says some of these are:
Prevention of Corruption Act, Chapter 9:16, Serious Offences Act, Chapter 9:17, Exchange Control Act,
Chapter 22:05, Insurance Act, Chapter 24:07, Banking Act, Chapter 24:01, Reserve Bank Act, Chapter
22:15, Criminal Procedure and Evidence Act, Chapter 9:07, Postal and Telecommunications Services
Act, Chapter 12:02, Sales Tax Act, Chapter 23:08, Audit and Exchequer Act, Chapter 22:03, Companies
Act, Chapter 24:03, Public Accountants and Auditors Act, Chapter 27:03, Building Societies Act,
Chapter 24:02, Bank Use Promotion and Suppression of Money Laundering Act, Chapter 24:24, and
Public Finance Management Act, Chapter 22:19.
It is against this background that corporate governance practices in Zimbabwe need to be looked at.
1.2 Statement of the problem
There are a lot of organisational failures in many organisations both private and public due to poor
corporate governance practices in Zimbabwe. There is no accountability and transparency in most
public transactions to the extent that fifteen billion dollars was lost and no one was held accountable.
The general business problem is that executives or managers are failing to steer their organisations to
profitability and prevent the collapse thereof. The specific business problem is that some executives
in organisations in Zimbabwe lack strategies to improve their understanding of the role of corporate
governance in preventing organisational failures. The regulatory authorities also seem to be sleeping
on the job or else they are corrupt also.
1.3 Aim of the paper
The aim of this paper is to investigate the major corporate governance problems being faced in
Zimbabwean Companies. The objectives of this study are to:
• determine the extent of adoption of the Zimbabwe corporate governance frameworks
• assess the extent of compliance with the Zimbabwe corporate governance frameworks.
• establish the reluctance of key stakeholders to adopt the new corporate governance code.
2.0 Interim literature review
2.2 Corporate governance defined
Definitions of corporate governance vary widely as suggested by Cadbury (2003) and he says they fall
into two categories. He acknowledges that the first set of definitions concerns itself with a set of
behavioural patterns which is the actual behaviour of corporations, in terms of measures such as
performance, efficiency, growth, financial structure, and treatment of shareholders and other
stakeholders. He goes on to the second set, which he clarifies that it concerns itself with the
normative framework: that is, the rules under which firms are operating-with the rules coming from
such sources as the legal system, the judicial system, financial markets, and factor (labour) markets.
Knell (2006) claims that governance means to control and regulate; the exercise of influence to
maintain good order and adherence to predetermined standards of behaviour and is supported by
Stoker (1998) who says governance is ultimately concerned with creating the conditions for ordered
rule and collective action. Furthermore, Tehrani (2016) defines, in general, that corporate governance
includes legal, cultural, and institutional arrangements that will determine companies’ future
direction and performance.
Knell (2006) further expresses that corporate governance is the regulating influence applied to the
affairs of a company to maintain good order and apply predetermined standards. He summarises that

GSJ© 2022
www.globalscientificjournal.com
GSJ: Volume 10, Issue 8, August 2022
ISSN 2320-9186 37

corporate governance is an ethical environment in which all business processes are undertaken where
the predetermined standards are publicly known and are outlined in the company code. He throws
light on their application and regulation that percolates throughout the business but must, naturally,
emanate from the top - from the board and feels that this is why corporate governance concentrates
on the board so much - its chairman, the objective balance of influence, delegation of authority,
selection and re-election, remuneration, risk assessment, information provision, performance review
and financial reporting.
Wagener (2013) indicates that corporate governance consists of the body of principles, rules and
practices that determine companies’ management and control. The same author affirms that it
therefore covers the distribution of powers between the shareholders and management of a
company, and especially the operation of the company’s Board of Directors.
2.3 Corporate governance pillars
The four primary pillars of corporate governance are fairness, accountability and responsibility and
disclosure transparency as indicated by Clarke (2011) and Drew and Kendrick (2005).
Youssef (2010) proposes a more elaborate list of key elements of good corporate governance
structure as fairness, honesty, trust and integrity, openness and transparency, performance
orientation, responsibility and accountability, mutual respect, and commitment to the organisation
and its stakeholders. Youssef (2010) argues that of importance is developing a model or governance
structure that aligns the values and goals of all corporate participants and stakeholders and ensures
an outcome that meets the needs of the individuals involved as well as those of the community as a
whole with the aim aligning the interests of individuals, corporations and society.
2.3.1 Equitable and Fair Treatment of Shareholders (Fairness)
Youssef (2010), Drew and Kendrick (2005) are in agreement that organisations should respect the
rights of shareholders and enable shareholders to exercise their rights by effectively communicating
information that is relevant, timely, understandable and easily accessible. He goes on to demonstrate
that fairness implies being unbiased and carries with it the requirement of independence and
objectivity, giving due consideration to the interests of all stakeholders involved. He further clarifies
that it is therefore recommended that the Board of Directors be comprised of a mix of executive,
nonexecutive and independent directors he expresses that organisations should recognise that they
have legal and other ethical obligations to all legitimate stakeholders. To this end, Youssef (2010) and
Clarke (2011) conclude that directors, in exercising their fiduciary responsibilities must act in the
interest of all stakeholders and direct and control their organisations according to acceptable local
and international governance norms.
2.3.2 Accountability and integrity
Cadbury (1992) remarks that Boards of directors are accountable to their shareholders and both have
to play their part in making that accountability effective. He adds that the boards of directors need to
do so through the quality of the information which they provide to shareholders, and shareholders
through their willingness to exercise their responsibilities as owners. This is supported by Youssef
(2010) who explains that corporate accountability refers to the obligation and responsibility to give an
explanation or reason for one’s actions and conduct. He adds that the board should be willing to
engage in effective two-way communication with the stakeholders about their actions and provide
reasons for those actions. Cadbury (1992) outlines that integrity means both straight forward dealing
and completeness. He adds that what is required of financial reporting is that it should be honest and
that it should present a balanced picture of the state of the company’s affairs. He further expresses
that the integrity of reports depends on the integrity of those who prepare and present them.
2.3.3 Responsible and Ethical Behaviour
Besada and Werner (2010) argue that ethical and responsible decision-making is not only important
for good public relations, but it is also a necessary element of risk management. He adds that
organisations should develop codes of ethical conduct for their directors and executives that
promotes responsible decision making. He further notes that many organisations establish

GSJ© 2022
www.globalscientificjournal.com
GSJ: Volume 10, Issue 8, August 2022
ISSN 2320-9186 38

compliance and ethics programs to minimise the risk of the firm stepping beyond ethical and legal
boundaries.
Ethical procedures and principles of conduct can be regarded as a form of self-regulation, placing the
responsibility to act professionally and ethically with the organisation as noted by Besada and Werner
(2010). They claim that it has been empirically established that organisations that practise good
corporate governance are more sustainable in the long term and display superior performance
results. To this end they remind us that the board has an obligation to act responsibly when making
decisions involving the corporation’s assets and ultimately stakeholder’s interests and investments.
They concludes that being socially and environmentally responsible is as important as being financially
responsible.

2.3.4 Disclosure and Transparency

Hess (2008) concurs with Youssef (2010) who states that corporate governance entails an inclusive
approach when developing corporate strategy, meaning that the purpose, goals and values of the
organisation and of the owners and shareholders be identified and communicated to all stakeholders,
thereby building mutually beneficial relationships. He indicates that transparency refers to the
openness and willingness to disclose financial performance figures which are truthful and accurate.
Youssef (2010) agrees with Mallin (2002) that disclosure of material matters concerning the
organisation’s performance and activities should be timely and accurate to ensure that all investors
have access to clear, factual information which accurately reflects the financial, social and
environmental position of the organisation. He goes on to say that organisations should clarify and
make publicly known the roles and responsibilities of the board and management to provide
shareholders with a level of accountability. He explains that procedures should be implemented to
independently verify and safeguard the integrity of the company's financial reporting. He further
indicates that the quantity, quality and frequency of financial and managerial disclosure should be
clearly defined and adhered to. This is also supported by Cadbury (1992) that openness on the part of
companies, within the limits set by their competitive position, is the basis for the confidence which
needs to exist between business and all those who have a stake in its success. He goes on to say that
an open approach to the disclosure of information contributes to the efficient working of the market
economy, prompts boards to take effective action and allows shareholders and others to scrutinise
companies more thoroughly.
Cadbury (1992) further explains that access to information is an essential precondition for checks and
balances to be effective and also enhances best practises in social accountability. He clarifies that
achievement of such access to information requires clearly defined company requirements for timely
and detailed reporting to stakeholders and regulators who are the beneficiaries of such information in
making vehement personal decisions. Sifile, et al. (2014) concur that in this regard it is worthy to
disclose future financing agreements as this advocates for transparency in maintaining and building
public dialogue when the institution publicly disclose such information as transparency at the highest
level will reduce risks of corruption and issues to do with revenue management and allocation.
Sifile, et al. (2014) state that the OECD principles provide a lot of matters about which disclosures
should be made and timely disclosures should include however not restricted to material information
on governance structures and policies and how to apply relevant corporate governance principles and
practices, material issues regarding employees and programmes for staff development and
stakeholders, financial and operating results, members of the board and key executives and their
remuneration and major shareholders and voting rights.
3.0 Research methodology
The researchers adopted an interpretive paradigm which advocates that it is necessary for the
researcher to understand differences between humans in our role as social actors. They demonstrate
that this emphasises the difference between conducting research among people rather than objects
such as trucks and computers. Saunders, et al. (2009) propose that crucial to the interpretivist

GSJ© 2022
www.globalscientificjournal.com
GSJ: Volume 10, Issue 8, August 2022
ISSN 2320-9186 39

philosophy is that the researcher has to adopt an empathetic stance and the challenge here is to
enter the social world of our research subjects and understand their world from their point of view.
Research design
This study is a descriptive survey in nature and it seeks to answer the questions of who, what, where,
when and how. The object of descriptive research is to portray an accurate profile of persons, events
or situations. (Saunders, et al. 2009).
The researchers used an inductive approach to this study because there is a problem with corporate
governance in Zimbabwe. So the researchers needed to find out what the problems are and what can
be done to solve these problems.
The data was collected through questionnaire and face to face interviews with respondents.
Sampling techniques
Purposive sampling
Saunders, et al. (2009) clarify that research using an inductive approach is likely to be particularly
concerned with the context in which such events were taking place. Therefore, the study of a small
sample of subjects might be more appropriate than a large number as with the deductive approach.
The study was looking at the corporate governance problems. T
Snowball sampling
Saunders, et al. (2009) propose that snowball sampling is commonly used when it is difficult to
identify members of the desired population. However, the authors state that the main problem is
making initial contact but once this is done, these cases identify further members of the population,
who then identify further members, and so the sample snowballs.
Data collection instruments
The researchers used interviews and questionnaires in collecting data
4.0 Results

Demographics
Figure 1: Age groups of the respondents

46-55 years old 18-25 years old

16% 12%

36-45 years old 26-35 years old

34% 38%

From figure 1 above, it can be noted that the age group 26 – 35 years old is the most common with
37.5%, followed by 36-45 years old with 34%, then 46-55 years with 16%, and lastly 18-25 years with

GSJ© 2022
www.globalscientificjournal.com
GSJ: Volume 10, Issue 8, August 2022
ISSN 2320-9186 40

12 %. However, 56 and above years old were non-existent. It thuds follows that a majority of 72% of
the respondents are old enough and deal with these matters on a day to day basis.

Educational Qualifications
Figure 3: Highest qualification of the respondent

Phd
3%
Diploma
Masters 10%
28%

Degree
59%

From the pie chart in figure 2 above, 59% of the respondents have degrees, 28% attained a master’s
degree and only 3 % attained a PhD but there is no one in the corporate world who has a certificate
as the highest level of education. This shows how educated or qualified the respondents were. Thus,
these respondents will be very knowledgeable about the issues at stake and answered the paused
questions properly. The issues of corporate governance if not simplified cannot be understand by an
ordinary man in the street. These respondents have great knowledge of corporate governance
matters.

4.4 Employment period and management level

28% of the respondents have between 11 – 16 years working in the corporate world, while a
reasonable 25% have 16 years and above in the corporate world and these respondents have
sufficient knowledge of what is happening in the corporate world thus will be able to give valuable
contribution in this study. 22% have 6 to 10 years, 19% have between one and five years and the
least had less than a year with 6%. This also shows how much experience most of the respondents
who participated in the survey were. Most of the respondents were in the lower management with
58%, middle level management with a 31% and only 11% in the top management. This shows that
either top managers are few of were too busy to fill in the questionnaire.

4.5 Major corporate governance problems

Figure 6: Comparison of the major corporate governance problems

GSJ© 2022
www.globalscientificjournal.com
GSJ: Volume 10, Issue 8, August 2022
ISSN 2320-9186 41

25 24 24 24
22 22 23 22
21
17

From the bar graph in figure 6 above, lack of transparency has the most frequency implying it is the
major problem. Lack of fairness, integrity and honesty follow up with the same frequency. However, it
can be seen that lack of commitment has the least frequency 17 which is slightly below the mean
implying people believes it is not a major problem. It can be deducted that all corporate governance
pillars are the centre of the major problems being faced in Zimbabwe.

Figure 7: Are companies in Zimbabwe ethical?

Strongly
disagree
13% Agree
10%

Disagree Neutral
35% 42%

From figure 7 above, 42% are neutral. 48 % disagree that Zimbabwean companies are ethical and only
10% agrees. This shows that the majority are of the opinion that the companies are unethical. The
fact that a combined 35% and 42 % do not agree with the fact that companies in Zimbabwe are not
ethical is an indictment on the systems and failure on the part of government which should be in a
position to regulate operations of the companies and organisations. The fact that these are people in
the corporate world and cannot give a clean bill of health to ethical conduct speaks volumes of what
is happening in the companies.

Figure 8: The extent to which the Zimbabwean government has adopted the corporate governance
framework

GSJ© 2022
www.globalscientificjournal.com
GSJ: Volume 10, Issue 8, August 2022
ISSN 2320-9186 42

Fully adopted
4%

Never adopted
19%

Uncertain
19% Partially
adopted
58%

Only 4% of respondents believed that the Zimbabwean Government has partially adopted the
corporate governance framework with 58%, 19% is uncertain and another 19% believe that the
government never adopted the corporate governance framework. However, 4% believes the
government has fully adopted it. The conclusion of the matter is that adoption is one thing and
implementation is quite another story in the context of Zimbabwe. A total of 38% include those who
are uncertain and those who say Zimbabwe Government never adopted framework for corporate
governance and they argue further that the levels of corruption in government organisations and
private sector is just too much.

4.6 Key stakeholders are ignoring the new code

60% of the respondents agreed that the stakeholders were ignoring the new national corporate code
whilst 20% strongly agree and the other 20% is in neutral. No respondent disagrees they are not
ignoring indicating that there is a big problem here.

GSJ© 2022
www.globalscientificjournal.com
GSJ: Volume 10, Issue 8, August 2022
ISSN 2320-9186 43

Figure 10: Regulatory authorities are taking measures to encourage adoption

Strongly
disagree
7%

Disagree
23% Agree
50%

Neutral
20%

50% of the respondents agree that the regulatory authorities are taking measures to enforce or
encourage the adoption of the national corporate governance framework whereas 20% are neutral
and 30% disagree.
Figure 11: Regulatory authorities are taking measures to enforce/encourage the implementation of the
national code

Strongly
disagree
3%
Agree
Disagree
37%
30%

Neutral
30%

Figure 11 above shows that 37% agree that the regulatory authorities are taking measures to enforce
or encourage the implementation of the national corporate governance framework whereas 33.%
disagree and 30% is neutral.
Figure 12: Corporate governance frameworks are being adhered to

GSJ© 2022
www.globalscientificjournal.com
GSJ: Volume 10, Issue 8, August 2022
ISSN 2320-9186 44

Agree
3%
Strongly
Disagree Neutral
29% 26%

Disagree
42%

It can be noted form figure 12 that 42% disagree to the fact that the Zimbabwe corporate governance
frameworks are being adhered to, whilst 29% strongly disagree and a mere 3% agree. 26% are
neutral.
4.7 Should board members of parastatals be selected by line ministers

52% of the respondents strongly disagreed to the selection of board members by line ministries. This
was informed by the situation where in all the cases where members of the board were appointed by
respective ministers nothing good has come out of it. Typical cases include Air Zimbabwe, Civil
Aviation of Zimbabwe (CAZ) Grain Marketing Board, ZINARA, just name a few. Thus poor performance
in these parastatals and other government companies that 68% disagree to the line ministers
selecting the board members of parastatals. If precedent is anything to go by, it would not be
advisable to have a line minister appointing board members. A mere 19% agree that it is fine for line
ministries to appoint board members provided it is professionally done and the process is transparent
and accountable in order to bring out good results.

4.8 Why managers’/board members are getting away with corporate malpractices and looting public
funds?
83 percent of the interviewees gave similar responses that the biggest problem is in the
appointments. They cited nepotism, and the political culture. These respondents went further to
argue that some are ‘political appointments’ meaning that the appointee has to serve the interest of
politicians instead of stakeholders. One of them even said that ‘it’s a scratch my back, I will scratch
yours’ situation. This means that the appointees are in their positions to serve their masters. Thus,
they have no interests in doing what benefits the nation at all. If they loot, misuse or abuse funds,
they will give part of the loot to the people who appointed them. 17% said that most of the people
are ‘politically connected’ to the extent that they are ‘above the law.’ The net impact of this according
to 67% of the respondents is that because of the nature of appointment of these boards, there has
not been any arrests of those who abuse office or look funds. This question got similar responses to
the first question where most of the answers dwelt on political connections and one of the
respondents said ‘a fish rots from the head.’ He added that ‘if the executive is corrupt, what do you
expect subordinates to do?’ on further questioning, the interviewee was reluctant to shed more light
on the statements. The other 52% of the respondents maintained that the Comptroller Auditor
General, Mildred Chiri has been producing reports annually but government has not acted on them
and the reports continue to gather dust while criminals are enjoying themselves at the expense of the
nation. 35% of the respondents argue that those who try to expose corruption are persecuted or
arrested on flimsy charges or simply eliminated from the scene.

GSJ© 2022
www.globalscientificjournal.com
GSJ: Volume 10, Issue 8, August 2022
ISSN 2320-9186 45

5. Recommendations
From the findings of this study, it is recommended that:
• the stakeholders should publicise the corporate governance frameworks. They should
advertise, create awareness and encourage adoption and implementation.
• They should also empower the regulatory and responsible authorities to effect arrest is one
has breached the law.
• The board remuneration committee must structure compensation programs to hold
executives accountable for specific measures of corporate performance and also to pay them
according to their companies’ performance. It was also noted that engagement, can be a tool
to motivate and retain executives who perform well and transparency, a commitment to
show shareholders how compensation decisions are made.
• On board appointment, it was noted that most people disagreed with the principle or idea
that board members should be appointed by line ministers. Therefore, it was recommended
that there must be an independent committee that is responsible to coordinate with
professional bodies for the appointment of board of directors. That committee then
recommends to the minister who should be appointed.
• On accountability, it was noted that effective compensation programs and conceptual
standards can be used to ensure that board members are compensated in line with their
shareholders’ interests. The researcher is of the opinion that if board members are selected
by line ministers, they are not serving the companies’ interest but those of the minister. They
state that who selects directors and with what motive, is a key issue.

References
Al-Majed, F.M. (2008), A Conceptual Framework for Reforming the Corporate Governance of Saudi
Publicly Held Companies: a Comparative and Analytical Study from a Legal Perspective. SABIC Chair for
IFMS.
Atkinson, R. and Flint, J. (2001), ‘Accessing hidden and hard-to-reach populations: Snowball research
strategies.’ Social Research Update, vol. 33, no. 1, pp.1-4.
Ayittey, G. B. (2002), Why Africa is poor? In: Africa unchained. New York: Palgrave Macmillan.
Babbie, E. (2007), The practice of social research. 11th ed. Belmont: Thompson Wadsworth.
Baltar, F. and Brunet, I. (2012), ‘Social research 2.0: virtual snowball sampling method using
Facebook.’ Internet Research, vol. 22, no. 1, pp.57-74.
Bernard, H. R. (2006), Research methods in anthropology. 4th ed. Oxford: AtlaMira Press.
Besada, H. and Werner, K. (2010), The Environment and Corporate governance in
Zimbabwe. Policy brief, vol.1 no.19, pp.1-8.
Brockman, P. and Chung, D.Y. (2003), ‘Investor protection and firm liquidity.’ The Journal
of Finance, vol. 58, no. 2, pp.921-937.
Browne, K., (2005), ‘Snowball sampling: using social networks to research non‐heterosexual
women.’ International journal of social research methodology, vol. 8, no. 1, pp.47-60.
Cadbury, A. (1992), The financial aspects of corporate governance. London: Burgess
Science Press.
Cadbury, A. (2003), Corporate governance and development. Washington DC, The World
Bank.
Cadbury Committee (1992), Cadbury Committee Report: Financial Aspects of Corporate
Governance. Basingstoke: Burgess Science Press.

GSJ© 2022
www.globalscientificjournal.com
GSJ: Volume 10, Issue 8, August 2022
ISSN 2320-9186 46

Chavunduka, M. D. and Sikwila, N. M. (2015), Corporate governance in Zimbabwe: State

owned enterprises and the Zimcode connection. International Journal of Economics,
Commerce and Management, vol.3 no.11, pp.651-661.
Clarke, T. (2011), Corporate governance and business ethics. London: Springer.
Creswell, J. W. (2009), The Research Design. 3rd ed. London: Sage Publications Limited.
Cohen, N. and Arieli, T. (2011), ‘Field research in conflict environments: Methodological
challenges and snowball sampling.’ Journal of Peace Research, vol. 48, no. 4, pp.423-435.
Council, F.R. (2012), The UK corporate governance code. London, September.
Coyne, I. T. (1997), ‘Sampling in qualitative research. Purposeful and theoretical sampling;
merging or clear boundaries?’ Journal of advanced nursing, vol. 26, no. 3, pp.623-630.
Datta, A. (2014), Business Ethics and Corporate social responsibility: A philosophic
treatment. Nairobi, The Standard Group.
Drew, S. A. and Kendrick, T. (2005), ‘Risk management: The five pillars of corporate
governance.’ Journal of General Management, vol. 31, no. 2, pp.19-36.
Engelbrecht, L. (2009), Institute of Directors in Southern Africa. The Handbook of
International Corporate Governance: A Definitive Guide, p.346.
Ereaut, G. (2002), Analysis and interpretation in qualitative market research. London: Sage
publications limited.
Essen, M., Engelen, P. and Carney, M. (2013), ‘Does ‘Good’ Corporate Governance Help in
a Crisis? The Impact of Country- and Firm-Level Governance Mechanisms in the European
Financial Crisis,’ Corporate Governance: An International Review, vol. 21, no. 3, pp.201-
224, Business Source Premier, EBSCOhost, viewed 21 June 2017.
Foya, D & Changunda, G.(2019) An Investigation of Corporate Governance Challenges
Facing Indigenous Banks in Zimbabwe; International Journal of Research and Innovation in
Social Science (IJRISS) |Volume III, Issue X, October 2019 page 100-116
Gall, D. M., Gall, J. and Borg, W. R. (2003), Educational research. 7th ed. London: Pearson
Education.
Gono, G. (2008), Zimbabwe's Casino economy: Extraordinary measures for extraordinary
challenges. Harare; Zimbabwe Publishing House.
Gono, G. (2004), Corporate governance: Determining the future of state enterprises and
parastatals. A Paper Presented by Dr G. Gono Governor of the Reserve Bank of Zimbabwe at
Montclair Hotel – Nyanga, Zimbabwe on the 1st of November 2004.
Greener, S. (2008), Business research methods. London: Dr. Sue Greener and Ventus
Publishing ApS.
Hess, D. (2008), ‘The Three Pillars of Corporate Social Reporting as New Governance
Regulation: Disclosure, Dialogue, and Development.’ Business Ethics Quarterly. Cambridge
University Press.
Iorio, S. H. (ed.) (2004), Qualitative research in journalism. London: Lawrence Erlbaum
Associates Publishers.

GSJ© 2022
www.globalscientificjournal.com
GSJ: Volume 10, Issue 8, August 2022
ISSN 2320-9186 47

Kanambura, A. (2017), Government ministers fight parastatal reforms: The Financial

Gazette. [Online] Available at: www.fingaz.co.zw. [Accessed 31/07/2017 July 2017].
Jimoh, J. and Iyoha, F. O. (2012), ‘Stewardship and Corporate Governance in the Banking
Sector: Evidence from Nigeria.’ Accounting and Finance Research, vol.1, no.1, pp.198.
Knell, A. (2006), Corporate Governance, Elsevier Science, Jordan Hill. Available from:
ProQuest Ebook Central. [3 July 2017].
Lipunga, A. M. (2014), ‘Corporate governance practices in commercial banking sector of
Malawi: Evidence from annual reports.’ Journal of Applied Finance and Banking, vol.4 no.5,
pp.115-133.
Mallin, C. (2002), ‘The relationship between corporate governance, transparency and
financial disclosure.’ Corporate Governance: An International Review, vol. 10, no. 4,
pp.253-255.
Mangena, M. and Tauringana, V. (2007), ‘Disclosure, corporate governance and foreign
share ownership on the Zimbabwe stock exchange.’ Journal of international financial
management and accounting, vol. 18 no. 2, pp.53-83.
Maune, A. (2015), ‘Corporate Governance in Zimbabwe: An overview of its current
state.’ Asian Economic and Financial Review, vol. 5, no 1, pp.167-178.
Mauthner, M., Birch, M. and Jessop, J. M. T. (2005), Ethics in qualitative research. London:
Sage Publications.
Martin, D. (2006), Corporate Governance, Thorogood Publishing, London. Available from:
ProQuest Ebook Central. [3 July 2017].
Morck, R., Yeung, B. and Yu, W. (2000), ‘The information content of stock markets: why do
emerging markets have synchronous stock price movements?’ Journal of financial
economics, vol. 58, no. 1, pp.215-260.
Muranda, Z. (2006), ‘Financial distress and corporate governance in Zimbabwean banks.’
Corporate Governance, vol. 6 no. 5, pp.643 – 654.
Mutasa, T., 2013. Corporate governance in creating business sustainability. Harare, s.n.
Ndhlovu, M. W., Bhiri, T. M. and Hlahla, B. P. (2013), ‘A comparative analysis of the
corporate governance practices in multinational and domestic banks in Zimbabwe.’ Journal
of Emerging Trends in Economics and Management Sciences, 4(5), pp. 473-480.
Owoye, O. and Bissessar, N. (2013), Bad Governance and Corruption in Africa: Symptoms
of Leadership and Institutional Failure.
Patton, M. (1990), ‘Purposeful sampling.’ Qualitative evaluation and research methods,
vol. 2, pp.169-186.
Ritchie, J. and Lewis, J. (eds.) (2003), Qualitative research practice. London: Sage
Publications limited.
Rossouw, G. J. (2005), ‘Business ethics and corporate governance in Africa.’ Business and
Society, vol. 44, no. 1, pp.94-106.
Rossouw, G. J. and Sison, A. (eds.) (2006), Global Perspectives on Ethics of Corporate
Governance, New York, Palgrave Macmillan. Available from: ProQuest Ebook Central. [21
June 2017]

GSJ© 2022
www.globalscientificjournal.com
GSJ: Volume 10, Issue 8, August 2022
ISSN 2320-9186 48

Saunders, M., Lewis, P. and Thornhill, A. (2009), Research methods for business students.
5th ed. London: Prentice Hall.
Scott, D. and Usher, R. (2011), Researching education. 2nd ed. London: Continuum
International Publishing Group.
Short, J. C., Ketchen Jr, D. J. and Palmer, T. B. (2002), ‘The role of sampling in strategic
management research on performance: A two-study analysis.’ Journal of Management, vol.
28, no. 3, pp.363-385.
Shumba, D. (2017), ‘Risk, resilience, and sustainability: How governance in Zimbabwe
countervails this nexus.’ The Journal of Sustainable Development, vol.17, no.1, pp.196-219.
Sifile, O., Chiduku, E. and Chavunduka, D. (2015), Evaluating corporate disclosure and
transparency for value creation in Zimbabwe listed companies. Harare, s.n.
Sifile, O., Susela, D. K. S., Mabvure, J. T., Chavunduka, M. D. and Dandira, M. (2014),
‘Corporate board failure in Zimbabwe: Have non – executive directors gone to sleep?’
Journal of Business and Management, vol. 16, no. 7, pp.78-86
Silverman, D. (2013), Doing qualitative research. London: Sage Publications Limited.
Stoker, G. (1998), ‘Governance as theory: Five propositions.’ International Social Science
Journal, vol. 50, no. 155, pp.17–28.
The Financial Gazette (2017), Government CEOs in firing line: [Online] Available at:
www.fingaz.co.zw. [Accessed 31/07/2017 July 2017].
Wagener, F. (2013), Corporate Governance. 3rd ed. Luxembourg: Bourse De Luxembourg.
Willis, J. W. (2007), Foundations of qualitative research. London: Sage publications limited.
Zvavahera, P. and Ndoda, G. R. (2014), ‘Corporate governance and ethical behaviour: The
case of the Zimbabwe Broadcasting Corporation.’ Journal of Academic and Business Ethics,
Vol.9, pp.1-8.

GSJ© 2022
www.globalscientificjournal.com